MPs bid to hide second home expenses with £23,000 no questions asked grant

Tuesday 27 May 2008 07:42 BST

MPs could seek to avoid future embarrassment over expenses by awarding themselves an automatic lump sum of £23,000 a year to pay for a second home.

An annual block grant would be one of the key recommendations of a committee chaired by Speaker Michael Martin, and would avoid the need for MPs to submit claims backed by receipts for the costs of running a home away from their constituencies.

But a spokeswoman for the House of Commons Members Estimate Committee said that the report it was preparing on the reform of Westminster's system of allowances had not yet been completed and it was too early to say what it would contain when presented to Parliament next month.

Speaker Michael Martin during Prime Minister's Questions. He chaired the committee reviewing MPs' expenses as well as trying to keep them secret

There was embarrassment for some MPs when receipts and invoices submitted in support of their claims for the Additional Costs Allowance were released last week, after a High Court ruling that they could not be exempted from Freedom of Information requirements.

Although the claims did not breach parliamentary rules, some eyebrows were raised at the sums claimed by Margaret Beckett for her garden and Barbara Follett for window cleaning. Tony Blair was shown to have paid a water bill late and John Prescott to have spent taxpayers' money on a mock Tudor gable for his Hull home.

He is now facing fresh pressure to reform expenses for London MPs following controversy over funds claimed by Ann and Alan Keen.

The two Labour MPs were criticised for using £175,000 of taxpayers' money to buy and run a flat near Parliament even though they also have a constituency home just nine miles away.

Health minister Mrs Keen, 59, and her 70 year-old husband purchased an apartment near the Royal Festival Hall using the second home allowance for MPs.

The couple - dubbed "Mr and Mrs Expenses" - also billed the taxpayer for £867.57 a month premiums on life insurance policies worth £430,000.

They also reignited the row over Outer London MPs being able to claim the additional cost allowance - up to £23,000 a year of taxpayer's cash to fund a second home - when at least 16 of them live less than an hour's commute from Westminster.

Mark Field, Conservative MP for Westminster and the Cities of London, and Tory MP for Wimbledon Stephen Hammond have led calls for a shake-up of the allowance, favouring replacing it with a higher salary for politicians.

The annual "block grant" of £23,000 - on top of a salary of more than £61,000 - would protect MPs from having to reveal details about the funding of their second home.

The controversial move is said to be the favoured of four options being considered by the Commons Members Estimate Committee. The others are a daily allowance of £175, a significant pay rise for MPs to pay for second homes but this would have to be more than £30,000 to fully replace the current allowance, or keeping the status quo.

Putney Conservative MP Justine Greening has stepped up the pressure for changes to ensure value for money for taxpayers. She told the London Evening Standard: "The Commons should look at the inner ( London) and outer boundaries more carefully in relation to the availability of public transport. Lots of Londoners commute for at least one hour into work."

'Mr and Mrs Expenses': Labour MPs Alan and Ann Keen have come under fire for using £175,000 of taxpayers' cash to buy a flat near Westminster, despite already having a constituency home less than an hour away

Her concerns were echoed by freedom of information campaigner Heather Brooke, whose three-year battle forced the Commons authorities to reveal the expenditure on second homes by 14 current or former MPs including Tony Blair, Gordon Brown, John Prescott, David Cameron, and the Keens.

Ms Brooke said: "This allowance was for MPs who lived far away and needed accommodation in London." On the Keens and their two homes, she added: "They are not breaking the rules but I don't think their constituents will be happy to see that they have a flat paid for by the taxpayer even though they have a short journey to Westminster."

Following the High Court ruling, all MPs' claims under the ACA are to be released this autumn, raising the prospect of the Commons authorities having to produce as much as one million pages of documentation revealing in detail how public money is spent by MPs on mortgage payments, utility bills, kitchen appliances and renovations.

The Members Estimate Committee launched its review of the expenses system after the row over former Tory MP Derek Conway paying his son from the public purse for apparently little work.

The committee's spokeswoman said: "The MEC are continuing to work on the review of allowances with a view to publishing a report in the middle of June, in time for the parliamentary debate early in July.

"The review continues to be work in progress and there is still a lot of work to be done before its contents are known."

The expenses' claims by the Keens for two mortgages and life insurance premiums were revealed after Mr Martin lost his High Court bid to keep secret details of payments to MPs.

Commons officials authorised the claims which helped the couple buy the flat, in a block with its own swimming pool and gym, raising questions over the stringency of the regulations.

The Keens can claim the allowance because they are both outer London MPs, Ann for Brentford and Isleworth, and Alan for Feltham and Heston - while inner London MPs get a special allowance of around £3,000.

The couple did try staying in a hotel for six months but decided instead to buy the flat in May 2002 after finding the arrangements "unsatisfactory".

They used two HSBC mortgages to buy the flat, estimated now to be worth £800,000 - one for £350,000 and a further £170,000 - through remortgaging their property in Brentford.

In the five years since they bought the flat Mrs Keen has claimed £87,325 and Mr Keen £87,803 in additional cost allowance - which can be used to cover mortgage, utility bills, maintenance and other costs for a second home.